MISSION: NO ATTRITION!

2010.03.12

“This  originally appeared on Plan Your Meetings (http://www.planyourmeetings.com), a free educational and social resource for meeting and event planners. For more meeting industry best practices, news, educational tools and advice, become a PYM Planner.” ( http://www.planyourmeetings.com/subscribe/)

 It seems that whenever I make a presentation the issue of attrition is always on people’s minds. Typically it is due to a recent episode where a group had fallen short on either rooms, food & beverage or both. Whenever I hear,  “How can I get out of paying it?”,  it is a constant reminder that preparation and planning before contracts are signed is a mandatory! Remember, attrition charges are part of the upfront contracting and negotiation process. Additionally, how you structure and specify how charges will be calculated and on what terms and conditions may could mean the difference between a few hundred and tens of thousands of dollars. Here are a few things to keep in mind:

  • “The key to protecting yourself is in spelling out anything that can be “interpreted” rather than understood.”
  • Be SPECIFIC!
  • Use examples in agreements when calculating fees/damages or penalties

The only way to avoid paying attrition is to not agree to any “performance” clause in your contracts. In some circumstances, venues will agree to this. Overflow or last minute/short term business are good examples.

  • Base damages on “profit” not revenue. Always specify that damages will be based on  the profit % of rooms or Food & Beverage, not retail pricing. This will save you up to 25% if you fall short.
  • Carefully word your attrition/performance clause. Request the following items be provided at the time that your damages are calculated:
    1. Sold out conditions at the venue. If you are being charged for 50 rooms, were there 50 available? You may find that you were inadvertently being “double dipped” based on rooms available.
    2. Audit and credit for all in attendance staying at hotel regardless of rate.With the proliferation of the internet and the fact that some reservations may not have been identified as with your group, by providing a registration list, an audit may reveal that you had more rooms occupied in the hotel on the nights you were short.
    3. Cumulative not daily calculations. Always ask that any performance fees be based on the total rooms usage, not daily totals. This way a spike on one day will assist in compensating on others where your pick up may not be as strong.
    4. Any Credit for unused comps/free rooms. Specify/request that any unused free or comped rooms be credited toward your totals.
  1. If this is a reoccurring meeting or event, or if you frequently do business with this property, request that you get a re-booking credit toward a future meeting. 

Do your homework. Gather your history. Planning is essential. Hotel agreements are crafted in favor of the venue. You can level the playing field and reduce your risk if you take the time during the contracting process to protect yourself and your company or client. Great meetings are profitable ones…WITHOUT ATTRITION!

Go forth, plan well and prosper!

All the best!

KJ

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Categories : Contracting Venues

Contracts, Relationships and Value

2010.03.11

“This  originally appeared on Plan Your Meetings (http://www.planyourmeetings.com), a free educational and social resource for meeting and event planners. For more meeting industry best practices, news, educational tools and advice, become a PYM Planner.” ( http://www.planyourmeetings.com/subscribe/)

Recently, at the Georgia MPI Meetings Exploration Conference, I had dinner with three of the opening general session panelists who would share their outlook for the near term for the meetings industry. We all seemed to share the same sentiment…our business is based on the benefits of people meeting face-2-face. That’s what meetings are, right? An opportunity for two or more to gather, share information, etc. Nothing new. But in the face of continued low occupancy and less meeting activity overall, many of the national hotel chains are moving away from the f-2-f, relationship building sales experience upon which their loyal customer base was built. Now, sales teams that may as well be located on what seem to be opposite sides of the country now contend for my, and your, hotel business. Now if you don’t have a favorite chain, or a relationship with a national salesperson, you are probably thinking, “So what?” The so what can mean higher rates, less concessions, less risk and contracts that are harder to implement.

I believe that “People do business with people they like and people they trust. Anyone can build a great hotel, but it’s the people that keep them running.“ Mostly it’s mutual respect, but in this business I’d like to believe that it’s more of a feeling of being taken care of. And when certain individuals that I trust move from one company to another, I typically will follow right along with them with my business. Why? Because they valued ME! Because they took care of my groups. They stood up for me when I needed a better rate, or more space than I could justify based on room block. We had a relationship. And we both valued the fact that we knew each other well enough to know what each other’s spouses name was, and that that person’s kids were starting school, or that they were moving into a new home. I remember getting a call from a major chain Nat’l Acct Rep years ago that I had worked with for many years. He was calling to tell me that he had taken a job with the Philadelphia CVB and was moving. “I told you you’d be one of the first to know,” he said. “I’ll make sure you are taken care of!” I still smile when we meet at conference and events and I still ask about his family. Relationship.

So what’s the point here? It’s about standing up for your needs as a buyer and also taking the responsibility to invest in your business future. Become the type of client that hoteliers and industry suppliers want to work with. Treat them as more than vendors. Treat them as partners. Here’s why. When you are forced to do business in a way that you either don’t want to, or don’t like to, you will find a way to be more comfortable with another supplier partner. With the trend to consolidate sales teams and sell remotely, the relationship part of this face-2-face business goes away. As does the trust that you had with someone that knows your group and company, and your style and your needs. With that also goes the ease of getting things done. The fun in sharing a cup of coffee or a drink as you put together the contract details. The ability to call when things are not-so-good to ask for assistance.

If this has happened to you and you thought you had no other option, think again. “Do not go quietly into that good night!” Make a call, write a letter, invest in your business relationships. It is OK to ask to be sold they way you like to be sold. And when you develop the type of relationships that I have enjoyed for oh so many years, you’ll be able to make a difference for those who have made a difference for you. I love this business…I mean, the people in this business. It’s why we enjoy what we do!

All the best!

 

Kevin R. Johnston, CMP
Kjohnston@Advantageeventgroup.com
www.AdvantageEventGroup.com

Categories : Contracting Venues